Should I increase the rent?

@sheroku

so tight you feel increasing the rent will stop them heating or eating, nooo prevent them having a holiday, at the LL's expense.

it's not the LL's fault there's a lack of housing & continually punishing private LL's will to make them sell up resulting in fewer rentals or more expensive rentals. If OP should need to sell the house, it'll go back on the rental market for more like £1200.

If you want to sell the property, that's a different kettle of fish altogether. You don't have any obligation to leave them there for decades! Keep the rent as it is, but warn them that you plan to sell in 2025, and that you will be serving them notice in September or something, if you feel really soft about it. They've had oodles of time to save for a deposit etc. if that's their next plan, which I presume it is at their age.

I rent out a 2 bed flat that I inherited from my uncle, and when I had tenants in for 5 years I didn't raise the rent because they were excellent tenants, and the cost of turning a property over is very high - cleaning, agency fees, repainting (after 5 years), probably new mattress or sofa etc. etc. It costs a FORTUNE and it's also quite stressful when you're not a pro landlord who takes all this in stride.

My own costs did not go up in that time, or at least not really noticeably (v low service charge). I didn't hear a peep out of the tenants in the whole time, except once when there was a slow leak and it took a couple of months to ID it and convince the water co. it wasn't actually in the property, and was therefore their responsibility, not mine. The tenants were angels about the whole thing.

OP, I would weigh up the costs of replacing a good set of tenants, bearing in mind that if they leave, the next tenants might leave after 12 months, or default on the rent etc. Reliable long term tenants are the dream. Your actual capital profit is in the value of the property NOT the rent.

Just explain you like them as tenants which is why you held the rate.
market rate is now £1100

you havent increased it in 6years so they benefited in that time but inflation/ costs mean rent will need to increase. Rent will be 950 from x
You then need to increase at 3-5% per year.

They are still getting a good deal as they are paying a couple of grand a year under market rate and ypu are mugging yourself off less.

I voted yanbu on the basis of raising the rent slightly, as you mentioned. They’ve had six years of no increases in a time of high inflation, after all. To whack on the full increase to current market rate would be unreasonable.
In terms of feeling bad, it really comes down to whether you need the extra money for upkeep etc and to make it worthwhile or are just happy to keep the rent low and know that you’re helping out a family who are good tenants.

Oh my word! Why would they ever move out? Why make such a stupid promise?

@CarpetSlipper

so you're saying it should cost the landlord to let them live in it?

I agree it's hard to save a deposit while paying rent, however, they need accommodation, lots of people move in with family etc.

why should the LL fund their deposit??

They don't want the burden of it but it then doesn't become yours to cover for them. If you need to increase the cover the mortgage and maintenance, then that's what you need to do.

It's always risky to make promises as you never know what can happen in life that makes you want to shed the extra responsibility of the extra property.

Of course they would prefer renting when it’s such a good price . ( sorry, couldn’t resist lol,)

@sheroku

shes not covering her costs. Why should she fund their holiday?

When I first got the property, market value was £450. It’s closer to £650 now. She’s not a great tenant in the sense that she pays late a lot, but she always pays and keeps it in decent condition. I don’t want to risk her leaving, though, because the costs of it being vacant for a month or two, the admin fees, council tax, etc, wouldn’t be worth it.

Mortgage conditions state the rent must be 25% more than the mortgage payment, which it currently is, but my rate is only 2.5%. I was thinking £50 sounds reasonable.

You should do small increases every year so your tenants know to expect them and can plan for it. Now the differential has become significant and it makes it hard to get them anywhere close to what they should be paying

If covering costs is an issue, then you don’t sound wealthy enough to make that promise.

I paid 800 for ages or something like that and rent went up to 950. I was annoyed and upset - as EVERYTHING was going up, not just rent. But it's fine now, I pay and have a secure home I'm grateful for. Shrug. I'd raise To 900 or 950. Still below market rate like mine. I have less money but what can I do. Single income family here. Would be nice to have extra money and save which I can't really do but hey ho.

This.

It’s more than just about whether your costs are being covered. You need to be charging more and then putting the money aside for repairs/renovations/tenant not paying.

I'm in a similar situation, OP, we haven't raised rent for 4 years.
I'm going to do a small rise this year and then an annual small rise.

It's not good business practice have a property let as substantially under market rate long term.

That was a dangerous promise to make. Circumstances can change and then you need to sell up. It sounds like you're doing okay financially with the property overall, so a smaller increase to start seems fair. Alternatively, maybe they'd buy it from you?

OP, you do need to wise up.

It’s not unkind to increase rent or charge market rate. I also think you were silly to promise it can be their home for as long as they wanted. Your circumstances could change, you may need or want to sell etc.

I am in the same position as you. Tenants have been in for 8 years without an increase. However, I am unlikely to get the same cushy mortgage rate when I renew this year, which would most likely mean the current rent doesn’t cover the condition of the mortgage.

It's good you have a nice, mutually beneficial relationship going with your landlord. Contrary to popular belief though, landlords are not rolling in it (double debt usually) and it's not being a decent person to expect them to go without or not cover their expenses to subsidise yourself. There's a difference between raising rent just to get in line (which is their right to do, even if a bit harsh all at once and potentially unfair) and raising rent because you're no longer covering the costs of insurances, repairs, maintenance, and any other costs that come with being a landlord. If landlords can't cover their costs and it's hurting them personally, they will sell, then you'll be having to find more expensive housing on a more competitive market.